Why are rent prices so high?

Supply

If you think real estate sales is a hot market now…you should see what is happening with the rental market in the Cocoa Beach area and throughout Brevard County. Low or no inventory. Multiple applications being submitted on homes. The laws of supply and demand are taking effect. Rent prices are taking off. The higher prices do not mean better quality either. They need painting, cleaning, and new flooring too, it is ridiculous.

Why is this happening? You remember the real estate market crash from about 10 years ago? You remember the shuttle program ending 2011? A lot of the people that were affected by this stayed in the area and became renters after they were either forced from their homes due to a foreclosure or doing a short sale. Our economy has been doing well the last few years. The space program is back. A lot of people are moving into our area for these reasons and renting first. We have a lot more potential tenants/renters than we do rental properties.

All of my data on what is available, prices, etc come from our MLS as of 4/19/18. I am only looking at unfurnished single family homes. I am not using any limits (garage, # beds/baths, city water, pool, allow pets, etc). Right now, there are 148 homes available in the county ranging from $1,00 to $5,500 (nothing is under $1,000 at this time)

rental inventory

So, what is available for $1,000? 2 houses in the county. 1 home in the county. Located in Titusville. 3 bedrooms, 1 bath 864 SqFt for $1,000 and 1 home in Melbourne that has 3 bedrooms, 1 bath, is 936 SqFt for $1,000.The lowest priced 3 bedroom 2 bath home is $1,200  located in Palm Bay. There are only 15 homes available right now under $1,200 If you know your lease will be up soon, contact the owner about extending it out at your current terms. Try and get a 2-year lease.

If you know you have to move and that you will be renting, start looking at least 60 days prior to the move. If you find a home that is acceptable to you and your family, put in your application with a move in date as soon as possible. This way you are not scrambling trying to find a place while getting your current home packed up for the upcoming move. You might have to pay rent in two places for a month, but it will reduce the stress involved if you need to be out of your current home and do not have a place to go.

Since there is a good chance you will be competing with another application and you want your application to stand out and be the one chosen. Here are a few ways to help.

  • If you know you have a low credit score, disclose this up front as you present the application.

  • Answer all the questions on the application, not the ones you think are important.

  • If possible, type it out. A clean & neat application is a good reflection of you.

  • Provide a cover letter on why you chose the home you are renting and a story about you and your family.

buying versus renting

Since the number of homes for rent are so low, this could be a good opportunity to consider buying a home. You could use the money it takes to secure a rental (first months rent, security deposit, last month’s rent, any additional deposits/fees for a pet) and put this towards a down payment on buying a home. You will need to give yourself more time because closing on a purchase could take 45 days after you have gone under contract to buy.

How do you know buying a home is the right option for you? I recommend doing two things. Find a real estate agent and a lender. Since I am a real estate agent, I believe finding and talking to a Realtor first is important. We work with a variety of different people who have purchased a home and have seen what it takes to complete the sale. We know what is for sale in the area and can let you know the price range of homes where you want to live. As a Realtor, we also know the right lender you should talk with based on your scenario. Some lenders are great with a first time home buyer. Other lenders specialize in a VA loan. You might need credit repair first. Maybe you are looking in an area that a USDA loan can work.

Bring to your lender

When you do speak with the lender, be prepared. You will need at the very least 2 years tax returns, 2 months of bank statements and 2 months of paystubs. They will ask you questions regarding your income and your expenses. They will want to know what loans you might have (car, school/college, medical, etc). They will need to pull your credit score. Once they have this information, there might be some additional work that needs to be done based on everything they see. Maybe you need to pay off a credit card. Maybe there are items on the credit report that will need to be followed up with. A good lender will be able to help with the verbiage needed with the letter to be sent to the credit bureau.

One last thing you will need to discuss with the lender is what your total payment would be based on the price point they recommend. Besides the principal and interest, you will need to have them factor in the property taxes, insurance and if there is a homeowners association payment (aka HOA). You can either work from the price point of the loan or from a total payment you are comfortable with that includes PITI plus HOA payment (PITI=Principal, interest, taxes, and insurance)

If you live here and think you will be moving soon or if you have plans to move to the Cocoa Beach area, give yourself some time to find a place to live. Remember every time you register on a website to get more information on a home, at least one real estate agent will be following up with you. Start interviewing real estate agents to find the one you are comfortable with to help you find a home. I recommend asking a friend, family member or co-worker who is local in the area you are moving to for a referral to an agent. Whether you are planning on buying or renting, have a plan B if you do not find a place immediately. You might have to stay in a hotel or find a short-term rental until you find your next home.


About the author:

Eric Larkin is a Broker Associate with REMAX Solutions. He lives, works, and plays in the Cocoa Beach area. Eric has been helping buyers and sellers with their real estate needs since becoming a real estate agent in 2003. His focus is always on helping, answering your questions, and doing everything possible to make certain you have a smooth transaction from beginning to end.

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